DIAMOND BAR – Federal agents arrested a business owner and past Democratic party donor on Tuesday for his alleged role in a multi-million dollar Ponzi scheme.

Syed Qaisar Madad, 65, was taken into custody at his Diamond Bar home by special agents with the FBI and IRS criminal investigation units.

Madad was arrested on federal wire fraud charges alleging he ran the scheme that squeezed $49 million from investors who suffered losses of about $32 million.

He was arraigned on a 16-count indictment Tuesday in U.S. District Court in Los Angeles.

Madad, a prominent member of the Pakistani community in Southern California, donated $30,400 to the Democratic National Committee in 2009 and his company gave $30,400 to the Democratic Congressional Campaign Committee in 2010, according to www.campaignmoney.com.

He also made $4,000 in contributions to Rep. Howard Berman, D-Van Nuys, in 2009 and 2010.

Herman and Sherman are running against each other in the 30th Congressional District.

. A $2,000 donation was given to Ami Bera of Elk Grove, who unsuccessfully ran for Congress in 2010 and is a candidate in Tuesday’s 7th Congressional District race.

The immigrant from Pakistan is the CEO and co-owner of Placentia-based Technology for Telecommunication and Multimedia, Inc.

Madad lost millions of dollars on bad trades and spent millions of dollars on Ponzi payments and personal expenses such as gambling.

A so-called Ponzi scheme offers investments that fraudulently pay returns to its investors from their own money or the money paid by subsequent investors, rather than from profit earned by the operator.

Madad allegedly bilked investors with lies saying his day-trading method would make consistent and substantial profits.

The indictment also alleges that Madad lied to his investors making them believe that their money was safe and would be returned to them if they requested.

Madad’s scheme surfaced after he was sued by one of his investors.

In lawsuits filed by the government seeking forfeiture of Madad’s residence and other property, authorities allege that, even after the victim’s lawsuit was filed, Madad continued to solicit investors to put money into his day-trading scheme.

The indictment also states that Madad provided the FBI with fraudulent documents that he claimed were brokerage statements for banking accounts in Switzerland. It also includes tax fraud charges based on Madad’s failure to report all of the money and benefits he received between 2007 and 2009 from his company.

According to the indictment, Madad allegedly withdrew investors’ money in cash and used millions of dollars to pay for his personal expenses and those of his wife’s business.

If convicted on all 16 counts in the indictment, he would be eligible to serve a maximum sentence of 260 years in federal prison.

Doug has covered crime and public safety in the Inland Empire since first becoming a reporter in 2012. With a long standing military background, Doug naturally heads into volatile situations in order to gather intelligence for those who rely on accurate and up-to-date information. Doug, a former combat Army veteran, attended the Defense Information School. At DINFOS, the United States Military school of journalism at Ft. Meade, MD, Doug learned all aspects of journalism before taking on a role as an Army Public Affairs Specialist for 16 months prior to his employment with the Southern California News Group. Doug is an avid outdoorsman who loves camping on the beach, but he's also a giant "Star Wars" fan.